In import and export agency business, generally, the party actually responsible for payment should pay the bill of exchange. If the contract between the principal and the agent stipulates that the principal is responsible for the funds for purchasing or selling goods, then the principal usually pays the bill of exchange. This is because the principal is the ultimate owner of the goods and bears the responsibility, which is more reasonable from the perspective of fund flow and liability definition.
If the agent signs the contract with the foreign party in its own name and assumes the primary payment obligation, such as when the agent buys out the goods and resells them to the principal, then the agent pays the bill of exchange. Different trade terms also have an impact. For example, under CIF (Cost, Insurance, and Freight) terms, the seller bears more responsibility. If the agent acts as the seller, the agent may need to pay the bill of exchange. Under FOB (Free On Board) terms, the buyer bears more responsibility. If the principal is the buyer, the principal may pay the bill of exchange. The specific arrangement should be subject to the contractual agreement between both parties.
Professional consultant answers
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
In import and export agency business, generally, the party actually responsible for payment should pay the bill of exchange. If the contract between the principal and the agent stipulates that the principal is responsible for the funds for purchasing or selling goods, then the principal usually pays the bill of exchange. This is because the principal is the ultimate owner of the goods and bears the responsibility, which is more reasonable from the perspective of fund flow and liability definition.
If the agent signs the contract with the foreign party in its own name and assumes the primary payment obligation, such as when the agent buys out the goods and resells them to the principal, then the agent pays the bill of exchange. Different trade terms also have an impact. For example, under CIF (Cost, Insurance, and Freight) terms, the seller bears more responsibility. If the agent acts as the seller, the agent may need to pay the bill of exchange. Under FOB (Free On Board) terms, the buyer bears more responsibility. If the principal is the buyer, the principal may pay the bill of exchange. The specific arrangement should be subject to the contractual agreement between both parties.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
Generally, the contract will specify who pays the bill of exchange, and it should be followed accordingly. If not specified, the party directly handling transactions with the foreign party is more likely to pay the bill of exchange.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Usually, it depends on the business model. If the agent only provides pure services to handle import and export procedures while the principal controls the fund flow, then the principal pays the bill of exchange.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
If the agent receives agency fees from the principal and the agreement includes bill of exchange payment services, then the agent should pay the bill of exchange. However, this situation is rare and requires explicit agreement.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
From trade practice, if the agent bears the risk of the goods, to protect its own interests, it may require the principal to pay the bill of exchange funds first, and then the agent pays the bill of exchange to the foreign party.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
If the agent receives advance payment for the goods, it may also pay the bill of exchange, depending on the contractual agreement between both parties.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
When the principal has good credit and the agent is willing to cooperate, the agent may pay the bill of exchange first, and the principal will settle the funds with the agent afterward.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Sometimes, it depends on the negotiation position in trade. The stronger party may require the other party to pay the bill of exchange, but ultimately, it is subject to mutual agreement.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
By convention, if the principal does not grant sufficient authorization and funds to the agent, the agent will not easily pay the bill of exchange, so in most cases, the principal pays.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
If the agent advances funds, the principal should repay them promptly, and the responsibility for paying the bill of exchange depends on the agreement when the funds were advanced.